Economy

The Irrawaddy Business Roundup (June 7, 2014)

By William Boot 7 June 2014

MOGE Looks for Joint Venture Partners in ‘Corporatization’ Plan

Burma’s controversial government-controlled oil and gas agency the Myanmar Oil & Gas Enterprise (MOGE) is inviting foreign companies to bid to take part in a new round of industry developments.

MOGE is seeking expressions of interest to take part in joint ventures ranging from onshore block exploration to pipeline construction, said the Myanmar Times, quoting agency director Than Min.

No details of the potential joint ventures have been announced but firms interested in being considered must register by June 30, Than Min told the weekly newspaper, adding that it marked the beginning of a corporatization program for MOGE.

MOGE has long been tainted by its close links to the former military regime, which struck secretive deals to sell Burma’s offshore gas abroad, notably most of the 50 billion cubic meters so far confirmed in the Shwe field in the Bay of Bengal to the China National Petroleum Corporation.

The Burmese government is preparing to apply for membership of EITI, the international Extractive Industries Transparency Initiative, which requires countries to be more accountable about business concerning natural resources such as oil and gas.

Race to Approve Bourse Rules Before 2015 Start-Up Deadline

Rules for the administration of a new stock exchange in Rangoon have yet to be finalized and approved, a key official said, despite an October 2015 start-up deadline.

A set of proposed rules based on the Securities Law passed by Burma last year have been submitted to the country’s attorney general, but they are only part of the process to establish a Securities and Exchange Commission, which will oversee licensing brokers, dealers and underwriters, Myanmar Securities Exchange Center managing director Shigeto Inami said, according to the Myanmar Times.

The Center is the administrator of Burma’s outmoded and tiny shares dealing business, which has only two companies listed, both of which are government-linked. The Center is a joint venture between the state-owned Myanmar Economic Bank and Japan’s Daiwa Institute of Research Limited.

Japan is helping the Naypyidaw government prepare for a modern, electronic stock exchange.

Shigeto Inami told the Myanmar Times he was unsure if a regulatory system will be in place by October next year. “At the moment we have a law but no authority to govern,” he was quoted saying.
Burma is the only country in the 10 nation Association of Southeast Asian Nations which does not have a functioning stock exchange.

Bangladesh Considers Nuclear Power Plant on Bay of Bengal Island

The Bangladesh government is considering building a nuclear power station on an island in the Bay of Bengal off the country’s southern coast.

An exact location for the plant has not been identified but some of the remote islands referred to by Prime Minister Sheikh Hasina are quite close to Burma’s border.

“We have many isolated coastal islands in the country’s southern part. I have envisaged building another nuclear power plant to meet our growing demand for electricity,” Hasina was quoted by Bangladeshi media as saying at a meeting with the country’s Ministry of Science and Technology.

Russian companies have begun building a large 2,000 megawatt nuclear power plant in northwest Bangladesh which is scheduled to be completed during 2017.

Bangladesh suffers from severe electricity shortages like Burma and is also building coal-fueled power plants, said the industry news website Energybangla.

Electricity shortages in southern Bangladesh are so bad that scores of factories in the port city of Chittagong have had to close down, Energybangla said.

New Burma Airlines Tout for Business at Bangkok Trade Fair

Two new private Burmese airlines used a travel trade fair in Bangkok this week to promote their businesses and plans for cross-border services.

Mann Yatanarpon Airlines, which currently operates only within Burma, announced at the Thailand Travel Mart its plans for flights between its home base Mandalay and three venues in Thailand—Chiang Mai, Bangkok and Phuket—said trade newspaper TTR Weekly.

“[Local] carriers will have to prepare for competition once the ASEAN single aviation market begins to take off as part of the ASEAN Economic Community,” airline marketing manager Wutyi Maw told the paper.

Also present at the Bangkok trade fair was Rangoon-based Asian Wings Airways which already runs flights between Mandalay and Chiang Mai. The firm outlined plans to use Mandalay as a hub for incoming travelers to fly on to several smaller airports within Burma, said TTR Weekly.

Ministry Says Planning Work Has Begun on China -Burma Railway

Survey work for a trans-Burma railway running from China to the coast at Kyaukphyu has begun, according to a report quoting the Ministry of Transport.

The 950-kilometer line will follow the route of the twin oil and gas pipelines also linking Kyaukphyu with China, said Eleven Media citing a ministry report.

“The report notes that religious and historical buildings are located on the 950 kilometer route, the report said. The ministry pledged that it would adhere to international standards in the project and that it would proceed with transparency,” said Eleven Media.

Kyaukphyu is where gas is piped ashore from the Shwe field in the Bay of Bengal and also where China has built a deep-draft port terminal to receive crude oil shipments from the Middle East for its pipeline.

The railway was agreed by Burma’s former military regime and is considered by China to be vital to its involvement in the Kyaukphyu Special Economic Zone. The proposed railway enters China via the border town of Muse.

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